By 2032 Bangladesh likely to plunge into debt distress: Abul Barkat

Abul Barkat, Professor at Dhaka University and President of Bangladesh Economic Association (BEA), fears that Bangladesh might be in deep soup with its foreign debt by 2032.

Before that Bangladesh will not be at ease in repaying the foreign loans during the 2027-28 period, he also feared.

“By 2027-28, when Bangladesh will start repaying loans for 4 to 5 foreign aid dependent mega projects, our position may turn from green to red in repaying foreign debt,” he apprehended.

By 2032, the danger may be even greater. “We have to think deeply if it is going to have an adverse effect on politics then.”

The Dhaka University professor and former chairman of Janata Bank said this at a press conference titled ‘Bangladesh Economic Association’s Alternative Budget Proposal 2022-23: A Democratic Budget Proposal’ organized by Bangladesh Economic Association at Eskaton on Sunday.

The debt-to-GDP ratio showed in the country is an official data. No country in the world has any accurate calculation. When the government starts repaying the loan for 10-12 mega projects by 2032 the scenario will be different.

We are seeing ominous signs. But the government still has time. “No more new mega projects; don’t delay in implementation of the projects and manage current account balance wisely,” he cautioned the government.

Bangladesh has now become dangerously income-inequality country. Therefore, the main goal of the budget should be to reduce income inequality and create decent employment.

In addition to income and wealth inequality, health and education inequality is now widening in the country. On the other hand, as a result of pandemic the number of poor people has doubled to 6.40 crore, he observed. Abul Barkat thinks that reducing this inequality should be the main goal of the next 5 budgets including the coming one.

He also suggested reducing the inflation and increasing the labour wages.

The Economic Association proposed an alternative budget of Tk20, 50,036 crore for the fiscal year 2022-23 where revenue income was set for Tk18,70,036 crore.

The economics association said the income was not unrealistic and it described alternative sources to collect more revenue. It said Tk2.10 lakh crore can be collected from wealth tax, Tk 1.6 lakh crore can be recovered from black money, Tk 1 lakh crore by increasing the import duty of luxury items, Tk 79,832 crore by preventing capital flight, Tk 8,500 crore from imposition of tax on foreigners working in Bangladesh and Tk6000 crore from other service sectors as revenues.

Abul Barkat said, “The government needs structural reform and political will to implement our proposed alternative budget.”

The Economic Association also proposed a total of eight alternative budgets including the upcoming one.

Social safety net programmes, education and technology, agriculture, public administration and health were identified as the top allocated sectors in this year’s budget.

Meanwhile, the organization demanded another two separate ministries named Ministry of Public Transport and Ministry of Research be established, innovation and development. Besides, the BEA advocated decentralization of the government system.

Zafrullah Chowdhury, a trustee of Gonoshasthaya Kendra, welcomed the budget. He joined the press conference virtually and said the government should seriously discuss the alternative budget.